By raising funds against the value of your invoices you can really improve your cashflow, but are factoring or invoice discounting right for you? Invoice finance comes in two key forms – factoring and invoice discounting. For both, cash is immediately advanced to you when you raise an invoice. You can draw an agreed percentage of each invoice, with the balance, minus fees, paid on settlement. The difference between the two is that factoring provides an additional service of sales ledger and collection management. Invoice finance does not necessarily work for all types of business though. It is particularly suitable for partnerships and limited companies selling goods or services on credit to other businesses.
In Brief: Invoice Discounting